Managing digital risks to protect human rights

The digital transformation continues to reshape our world, generating both significant opportunities and potential risks – especially with regard to human rights. Digital ID systems and health services, for instance, can be crucial to expand public services and increase their efficiency. However, without the proper data protection in place they can also be misused for surveillance and discrimination purposes. AI-powered chatbots constitute another field that could reinforce bias and stereotypes in society if they are not properly trained.

On 11 September 2024, a webinar titled "Managing Digital Risks in Development Finance" – co-organised by KfW, the Danish Institute for Human Rights (DIHR), Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) and the UN Human Rights Office – was held to develop a mutual understanding of human rights risks, especially within the context of operations supported by digital finance institutions (DFI). Participants discussed recent initiatives and innovations that address these risks, focussing on the Digital Rights Check and its new tool developed by KfW and GIZ in collaboration with the DIHR, which is specifically designed to sensitise users working in intergovernmental financial development cooperation.

"Sensitisation tools efficiently enhance our capacity to mitigate human rights risks related to digital projects financed by us, thus complementing standard environmental and social due diligence and monitoring processes," said Christian Krämer, Member of the Management Committee at KfW Development Bank, in his opening speech.

The tool guides users through a series of questions, offering practical assistance and insights as well as case studies and further resources. Upon completion, users receive a summary along with a PDF file containing all the recommendations generated by the tool based on the user’s responses. This file can be shared with project partners, consultants and digital service providers to better address and mitigate potential human rights impacts related to the digital solutions used.

The webinar emphasised that the Digital Rights Check is not a compliance exercise but rather a tool for sensitisation and guidance. It does not provide a definitive risk assessment or binding recommendations; instead, it helps users ask the right questions and align their projects with the Digital Principles for Development.

The webinar also looked at the “Investor Guidelines for Responsible Investments in Technology” with its corresponding “Market Study on the ESG Risks of Technology Investments”, recently published by KfW’s subsidiary DEG (Deutsche Investitions- und Entwicklungsgesellschaft mbH), recommending the Digital Rights Check for DFIs and therefore contributing to the current discourse on responsible digitalisation. Furthermore, the new “UN Human Rights Office 2024 Policy Brief on DFIs and Digital Risks” was presented, which urges multilateral DFIs to integrate these types of digital risk management tools and guidance into their day-to-day digital operations.

Looking ahead, the ongoing use and refinement of sensitisation tools such as the Digital Rights Check will be crucial for DFIs to effectively manage digital risks and uphold human rights standards. As digital transformation accelerates, it is imperative that DFIs adopt these tools and make them part of their day-to-day operations, thereby fostering a culture of proactive risk management and ethical digital development.